Crocs Organizational Structure
Running Head: Crocs
Crocs
Jess R. Vasquez
Colorado State University – Global Campus
ORG 500
Foundations of Effective Management
Jama Bradley, Ph.D.
21 November 2009
Abstract Crocs Inc., was founded in 2002 and immediately realized success. The company had a great idea and moved quickly to capitalize upon it. Early in 2006 the company entered into its IPO, it too was a huge success. “At the height of the real estate market, in 2006, the company sold shares to the public, raising more than $200 million in the biggest stock offering in shoe history” (Mui, 2009). These successes were due in large part to the fact that the product had a large appeal and the supply and production models used were revolutionary to the apparel industry and were incredibly efficient. However, was too much focus and importance put on building a strong supply and production model and too little emphasis placed on understanding the importance of managing its value chain?
The supply chain created was one which was developed in three stages. First, the company moved to purchase the manufacturer of the product in order to have proprietary rights to the raw materials. The second stage was to begin to use contract manufacturers in different countries. Third, the company moved to bring some of the global operations which had been contracted out, in house. This was accomplished by developing company-owned manufacturing sites and warehouses located in strategic areas depending on need (Holloway & Lee, 2007).
Value Chain: Industry Differentiation Crocs is a unique company as it is manufacturer, distributor, and retailer of its own product. This operation has obvious advantages; most important is the ability to lower overall cost to the end use customer. The company was certainly profitable. In 2005 and 2006 the company’s net profit margin of 18.2%, led the industry; Deckers Outdoors had the second highest margin at 10.4%. Crocs aggressive manufacturing and distribution
Crocs
Jess R. Vasquez
Colorado State University – Global Campus
ORG 500
Foundations of Effective Management
Jama Bradley, Ph.D.
21 November 2009
Abstract Crocs Inc., was founded in 2002 and immediately realized success. The company had a great idea and moved quickly to capitalize upon it. Early in 2006 the company entered into its IPO, it too was a huge success. “At the height of the real estate market, in 2006, the company sold shares to the public, raising more than $200 million in the biggest stock offering in shoe history” (Mui, 2009). These successes were due in large part to the fact that the product had a large appeal and the supply and production models used were revolutionary to the apparel industry and were incredibly efficient. However, was too much focus and importance put on building a strong supply and production model and too little emphasis placed on understanding the importance of managing its value chain?
The supply chain created was one which was developed in three stages. First, the company moved to purchase the manufacturer of the product in order to have proprietary rights to the raw materials. The second stage was to begin to use contract manufacturers in different countries. Third, the company moved to bring some of the global operations which had been contracted out, in house. This was accomplished by developing company-owned manufacturing sites and warehouses located in strategic areas depending on need (Holloway & Lee, 2007).
Value Chain: Industry Differentiation Crocs is a unique company as it is manufacturer, distributor, and retailer of its own product. This operation has obvious advantages; most important is the ability to lower overall cost to the end use customer. The company was certainly profitable. In 2005 and 2006 the company’s net profit margin of 18.2%, led the industry; Deckers Outdoors had the second highest margin at 10.4%. Crocs aggressive manufacturing and distribution
References: Big Charts. (2009, November 12). Retrieved from Big Charts: http//www.bigcharts.marketwatch.com Coulter, M., & Robbins, S. P. (2007). Management. Upper Saddle River: Pearson Education Inc. Gerzema, J., & Lebar, E. (2008). The Brand Bubble. San Francisco: Jossey-Bass. Holloway, C., & Lee, H. (2007). Crocs: Revolutionizing and Industry 's Supply Chain Model For Competitive Advantage Mui, Y. Q. (2009, Jluy Thursay). Once trendy Crocs could be on their last legs. Washington Post , p Roberts, C. (2009, July 16). 100 million foam clogs later. New York Daily News . The Apparel Global Value Chain. (2009, July 9). Retrieved from Industry Canada: http://www.ic.gc.ca